Skin cancer is the most common form of cancer in the United States. It is caused by chronic and excessive exposure to environmental factors like ultraviolet (UV) radiation and chemical toxicants. UV radiation and chemical toxicants contribute to the development of skin cancer by creating DNA damage that can yield mutations in housekeeping genes and proto-oncogenes which disrupt intracellular signaling mechanisms. One vital signaling mechanism is tyrosine phosphorylation signaling. Phosphotyrosine signaling is regulated by the counter-activities of protein tyrosine kinases (PTKs) and protein tyrosine phosphatases (PTPs). PTKs have been established as critical contributors in carcinogenesis, thus many anti-cancer drugs have been developed that target these proteins. Although these current pharmaceuticals have been effective in some cancers, they have side effects. Therefore, alternative therapies are needed to supplement the current ones. PTPs have not been studied in regards to skin cancer because it had previously been shown that PTPs are inactivated in keratinocytes upon exposure to UVB radiation. However, recently we have discovered that T-cell protein tyrosine phosphatase (TC-PTP) is activated following UVB or chemical exposure. TC-PTP is mainly localized to the cytoplasm in keratinocytes and upon UVB irradiation it is translocated to the nucleus where it contributes to the inactivation of signal transducer and activator of transcription 3 (Stat3), a well-known oncogenic protein. TC-PTP, and similar PTPs, may be novel targets for the development of anti-skin cancer therapies. Our hypothesis is that TC-PTP plays an important role in the regulation of Stat3 signal transduction following exposure to environmental toxicants, and loss of TC-PTP will lead to constitutive activation of Stat3, which in turn promotes the development of skin cancer. The proposed project will use molecular and cellular approaches to accomplish the following objectives: 1) examine the function of TC-PTP in keratinocyte proliferation, differentiation, and survival, and define the mechanism of nuclear translocation of TC-PTP to determine its impact on keratinocyte proliferation; and 2) determine the potential tumor suppressive role(s) of TC-PTP in environmental skin carcinogenesis by using two skin-specific transgenic mouse models. This research will provide new insights into the specific functional roles of PTP in the cellular mechanisms involved in environmental skin carcinogenesis, which in turn will help identify novel therapeutic targets for skin cancer prevention and treatment.